Career Advice: Would you take a step back to advance forward?

Do you want to lead a team? Do you want to become a manager or stay a developer? I would think more about that. You're very close to becoming a manager and no longer performing IC work like coding. That's a great career path, but you can also push to stay in a technical career path and go down the principle engineer route.

As others have mentioned, the real question is what your goal is and whether or not this is a step that gets you closer to realizing it.

If your goal is more leadership and less of an IC role, then what you're proposing is probably a step in the wrong direction.

If your goal is to live in Switzerland, then you just have to ask yourself if you're OK with the drop in order to achieve your goal.

If your goal is to make a change in type of programming being done (e.g. from web front-end to video games) then taking a title (and possibly pay) drop is reasonable. You're going from being an possible authority in a particular domain to someone who is learning. Your current skills and experiences will be highly valuable, you'll learn faster than others, but you'll still have a lot to learn. I don't know how things work in the EU, but here in the States most likely you'll find yourself needing to job hop again in 2-3 years in order to get back to where you originally were (or more).

Answering your actual question, though... I did make that leap in my career and it was worth it. The change I made wasn't so drastic as my example. I had an end goal in mind and came up with a path to get there. It took me a while, but each step was lateral (my current skills were highly applicable) and I learned a lot each step. My path was * video games * video game telemetry (databases and data ETL) * big data at Disney * biotech (where I am now).

TL;DR - what's your goal? Does this change get you closer to realizing it?

In software engineering, some companies have much higher standards than others. I'm just guessing, but often this situation happens when you are trying to step up from a lower quality employer to a higher quality employer.

Money is more meaningful than titles. Would you be making more money as an Engineer II at the new company than as a team lead at the old company? If you aren't, then it's probably a step backward.

If you would be making more money, then this is a step forward. In fact, it's a great opportunity, because you can get even further in your career by getting promoted to the "senior" level at your new workplace.

TBH If there's no meaningful salary bump, location adjusted aside, I'd say they're trying to lowball you.

Having held roles with all of the titles you mention, I'd say relax and take the advice of a few here:

    * "do you really want to move to Switzerland?"
    * "Roles are meaningless"
    * "sounds like a signal that they like you as a candidate"

These resonated with me because Switzerland sounds awesome, roles are meaningless, and signal/noise ratio is a great way to think about hiring. Many people have great signal but drag a freight train of noise behind them.

Having held the principal title when I was 27, most gigs beyond that were steps down in terms of title, salary, or benefits. Doesn't really matter as long as the next people hiring you can see your current value given your previous trajectory.

My path is only unusual to the extent that I worked in small R&D labs and pre-VC startups so the value equation of a greenfield prototype hacker is really not what you know or have experienced, but "how fast can you learn because we just made the thing yesterday, QA'ed it today, and would like to ship tomorrow", "how fast can you go from napkin sketch to believable demo" and then "how fast can you ship clean code vs. that mess the CTO dreamed up at 3 AM?"

Your trajectory may be different.